Insight

Loyalty: play your points right

Travel buyers can make corporate and leisure loyalty programmes work for them, and with careful planning enhance duty-of-care, traveller wellbeing and staff retention – and even save a bit of cash along the way.

Frequent flyer programmes have long been the bane of travel buyers’ lives. The ability to put points into an ever-expanding loyalty wallet is often irresistible for travellers, who book outside policy for personal gain. Not only does this undermine corporate deals, reducing the amount of business given by their employer to a particular airline, it also lays waste any duty-of-care. Passionate point-collectors are also financially frustrating to organisations whose policy is the lowest logical fare.

However, travel buyers can make corporate and leisure loyalty programmes work for them, and with careful planning enhance duty-of-care, traveller wellbeing and staff retention – and even save a bit of cash along the way.

Rewarding travellers

So which airlines are pulling out the stops for their members? Programmes that reward businesses and travellers alike are largely aimed at SMEs or larger organisations with a smaller travel spend. Emirates’ business customers can sign up for Emirates Business Rewards and individuals benefit from Emirates Skywards points; similarly, Virgin Atlantic’s Flying Co (corporate)/Flying Club (individual), Etihad Business Connect/Etihad Guest, Singapore Airlines HighFlyer/KrisFlyer and Qantas Business Rewards/Frequent Flyer.

Some companies make massive savings from the programme. However, Hero Trew, global travel manager for Endeavour WME IMG, says: “We were, until recently, a member of BA’s On Business, but BA took us off as we were not considered to be an SME – and we were probably too good at redeeming our points!

“We now have an improved route deal (since the beginning of 2018) but have yet to calculate the savings from switching to the new route deal. On Business delivered us savings of around £175,000 in 2017.”

Meanwhile, a financial services client of Corporate Traveller accrued sufficient points with Swiss to save £3,000 on its hotel spend in the past 12 months by redeeming points against hotel vouchers on the Star Alliance Partner Plus Benefit programme.

New trends

The most recent change in the common loyalty programmes is the move away from awarding points for miles flown and towards a revenue basis. American carriers led the way in 2015 and Oman Air, Air France KLM and Lufthansa have followed suit.

“British Airways says it will shift Executive Club to that model as well,” says Phil Seward, senior vice-president, loyalty strategy Americas for Collinson. However, BA told BBT: “There aren’t any immediate plans to do so.”

Although longer journeys are more expensive, revenue and mileage-based rewards do not work out the same; tickets from London to Rio and Tokyo (both around 9,000km), for example, would cost different amounts and, because points are calculated on fares less taxes, businesses spend more than travellers are rewarded for.

Unusually, however, both airlines and buyers see the change as positive. It removes the inequity created by rewards based on kilometres flown and booking class, and it rewards organisations that spend a lot on air fares. It might, however, act as an incentive to rogue travellers to book late in order to pay a higher fare and be rewarded for it. It’s swings and roundabouts.

Airlines have also ensured travellers can earn without leaving the ground and credit card partners are particularly popular. “The primary intent of a co-branded card is to provide the opportunity to earn on everyday spending, such as grocery shopping, daily coffee, and it gives the individual a way to earn significantly more of that currency,” says Seward, although he admits: “The decision whether to use a loyalty card or corporate card is always there.”

Airline alliances

Meanwhile, with more airline partnerships being formed, and alliances in general gaining more clout, it is surprising that there is currently no single loyalty programme that operates across one alliance. However, participant airlines recognise the members of each other’s programmes and travellers can generally choose which currency they earn in.

And with airline distribution becoming more complex for travel buyers, even taking NDC out of the equation, thankfully airlines remain booking-channel agnostic when it comes to allowing travellers to accrue their points for miles – for now.

This is a big difference compared to hotel loyalty schemes, which notoriously tempt their programme members to book direct for in return for extra rewards. In fact, airlines are surprisingly shy of admitting to courting members, although they do say they poll them to ensure the programmes continue to match members’ requirements and expectations.

Loyalty schemes continue to evolve and compete in their quest to attract travellers. Being pragmatic, finding the right corporate programme for employees and encouraging its use is the most positive way towards achieving compliance and keeping travellers happy in the process.

Collinson’s tips: Making the most of loyalty points

Think strategically: Join the corporate programme that gives you the greatest coverage across the airlines and routes your employees utilise most often, ensuring the greatest opportunity for earning and redemption. Focus on one primary carrier within an alliance, offering co-branded credit cards, and with the lowest threshold for earning elite status.

Start socialising: Follow the airline’s social media accounts to find out about promotions and offers; this can also be a responsive channel for traveller issues.

Mix and match: Ensure your employees are enrolled in the airline’s consumer frequent flyer programme, so they can earn miles and take advantage of other benefits.